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R&D claims delayed as HMRC struggles to keep up

21st Aug 2019
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Businesses are experiencing “significant delays” to their Research and Development (R&D) tax credit claims, as HMRC struggles to keep up with the scheme’s popularity.

In an ideal world, HMRC aspires for an R&D tax claim turnaround of 28 days. But as is often the case, the reality diverges from the ideal.

The Chartered Institute of Taxation (CIOT) recently reported that numerous members had experienced problems with their claims taking much longer to go through.

To their credit, the tax authority has been upfront about the problems. In a statement to AccountingWEB, the Revenue attributed the delays to a mix of the scheme’s popularity, a lack of resources and HMRC’s duty to ensure payments are correct

“HMRC reviews tens of thousands of claims for R&D tax relief each year. Claims for relief are carefully scrutinised irrespective of the size or structure of an applicant.

“We are sorry that some businesses have not received payments as quickly as we would like and staff have been recruited to help with processing.”

The delays, according to the CIOT, peaked in July, amounting to 95 days for R&D tax credit claims and over 200 days for RDEC (the research and development expenditure credit for large companies).

Alongside the promise to recruit extra staff, the CIOT said, HMRC has also committed to:

  • Not differentiating between R&D tax credits and RDEC claims for processing purposes and are aiming to get up to date on all claims.

  • Moving claims processing to colleagues in customer services group who, with a wider pool of staff, will be able to cope better with seasonal fluctuations in demand.

  • Continue to provide updates through the R&D Consultative Committee regarding their current position and expected turnaround times.

Since the peak in July, signs are that the situation is improving. Turnarounds for R&D tax credits and RDEC claims have come down, according to Sacha Dalton, a CIOT technical officer.

“The situation is slowly improving, although there is still some way to go, particularly for RDEC claims. But we hope that HMRC will get back on top of things by the end of September,” Dalton told AccountingWEB. She reiterated that, as far as the CIOT was aware, the delays were primarily down to a lack of resources.

That said, AccountingWEB has reported in the past about increased scrutiny of R&D claims by HMRC, spurred by the incentive’s popularity: in particular the more complex, higher-value large company RDEC scheme.

The CIOT has said it is monitoring the situation, and have asked members to get in touch regarding their experiences of dealing with R&D claims and, in particular, processing times. The technical team can be reached here.

Replies (2)

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By SteveHa
22nd Aug 2019 08:46

It's all well and good diverting the work to other staff to bring down the waiting time, but the work normally done by those other staff will suffer as a consequence.

HMRC's approach of rob Peter to pay Paul when it comes to resources is untenable, and the only real solution is to adequately staff the department. This is something that ministers need to be focusing on.

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By Justin Bryant
22nd Aug 2019 09:09

I would happily help out HMRC here and only charge 1% of all the dodgy R&D claims I identified as my fee. I would become very rich indeed I expect on that deal. Win-win.

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